How to Master Your Money Habits

Want to master your money habits? According to “The Happiness Project” author Gretchen Rubin, there is no magic bullet. You have to know yourself.

“There’s this really strong impulse among habit experts to have one-size-fits-all solutions,” she says in a phone interview from her home in New York. “Like, ‘Only use cash! Always use cash!’ Because you feel the pain of cash, and you’re going to spend less, and that’s why casinos use chips so that you don’t realize that you’re spending cash.”

What she found when doing research for her new book, however, was that for some people, cash is king. For others, however, credit cards are a wiser choice, because of the accountability provided.

“So many people have said to me, ‘You know, when I have cash in my pocket, it just goes. I don’t even know what I spent it on. With a credit card, I know what I spent it on. I can’t pretend that I don’t know, because I see it.'”

Same for online shopping, she says.

For one person, what turns into click-click-click impulse purchases in the middle of the night and a stack of boxes on the porch a few days later, allows another to stay away from all the pretty temptations surrounding them at the mall and just buy the specific item they need.

“There’s no one-size-fits-all solution. You really have to look at yourself, and say, ‘Well, when do I stick to my budget? When do I impulse buy?’ Because all of these things hit different people differently.”

Do you respond to outer expectations and therefore need help with accountability (such as a financial planner or a partner reviewing your credit card bills)? Or are you a bit of a rebel who values freedom? If so, Rubin says, you will identify with thoughts like, “Those credit card marketers aren’t gonna force this junk on me. I’m not gonna fall for that. … I want to be able to do what I want to do. I don’t want to be beholden to anybody.”

Rewards vs. ‘Treats’

Once you understand yourself, she then offers 20-plus strategies for creating good habits, breaking bad ones, and sticking to it all. Strategies such as avoiding rewards.

“A reward is something that you’ve earned, so you have to justify it,” she explains. The problem with that, as she writes at the beginning of her book, is that what you want with a habit is to get out of the business of making decisions. Instead, you want to put an activity on automatic, so that it just happens.

“Any time there’s a reward, you’re making a decision. ‘Do I get the reward? Have I earned the reward? Is this enough to get the reward? Well, I’m supposed to get a reward if I go running, but I can’t go running today because I hurt my foot, so maybe I should get the reward anyway? Because it’s not really my fault.'”

Rewards open up a system of bargaining and/or deprivation, which she says is undermining for habits. So instead of a reward, she suggests giving yourself treats. Treats, she explains, are something you get only because you want them.

“You do not earn them. You do not justify them. You just want a treat. You walk in the door (after work) and you’re like, ‘I feel like doing a crossword puzzle on my iPad.’ OK. You can do that, because you are giving yourself a treat, just because you want it.”

Rubin says she was surprised by how important this process is. Many people feel like the idea of treats is selfish and self-indulgent, so they want to make everything into a reward because they want to always feel like they’re earning everything.

“But when you give yourself treats, you give yourself energy. Then you feel cared for, and that increases your self-control. … And when you’re trying to keep your good habits, and you’re trying to just behave yourself generally, you want to keep your self-control high. … When you give more to yourself, you can ask more from yourself.”

So don’t be afraid to coddle yourself a bit. “My sister says, ‘You’ve got to be your own grandmother, you know? Would you like a freshly sharpened pencil? Or how would you like a lovely cup of coffee?'”

It is important to know that while, yes, everyone responds differently, Rubin does suggest you watch out for three potentially dangerous treats: food and drink, technology, and — when it comes to thinking about money — shopping.

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